Everything You Need To Know About FHA Manufactured Home Loans

If you’re looking for an alternative to a traditional, site-built home, you may want to consider financing a mobile home through the FHA manufactured home loan program. Sometimes called an FHA loan for a mobile home, this government-backed mortgage option allows borrowers with imperfect credit to purchase an affordable home.

Manufactured homes, also known as mobile homes, can be an affordable way to buy a house. With a manufactured home, you can own your own place without spending a fortune. But financing a manufactured home purchase can be tricky.

This is where FHA manufactured home loans come in. FHA loans through the Federal Housing Administration help buyers with financing. If you want to buy a manufactured home, an FHA loan could make it more affordable

In this comprehensive guide, I’ll explain everything you need to know about getting an FHA manufactured home loan I’ll cover what a manufactured home is, FHA loan requirements, loan terms, and more. Let’s dive in!

What is Considered a “Manufactured Home”?

The term “manufactured home” refers to a specific type of factory-built housing. Manufactured homes are built to meet federal standards from the Department of Housing and Urban Development (HUD).

Specifically, a HUD-approved manufactured home must:

Be constructed after June 15, 1976 when HUD building standards took effect
Be built offsite in a factory per HUD’s Manufactured Home Construction and Safety Standards code
Have a HUD red certification label attached to each transportable section
Be built on a permanent chassis so it can be transported

Manufactured homes may also be called mobile homes. But true HUD-approved manufactured homes are different from trailers or RVs.

How FHA Loans Work

FHA loans are government-backed mortgages insured by the Federal Housing Administration. When you get an FHA loan, the lender is protected from losses if you default. This makes lenders more willing to approve borrowers.

To get an FHA manufactured home loan, you work with an FHA-approved lender. The home must meet specific FHA requirements. But FHA loans have more flexible qualifying guidelines than conventional mortgages.

FHA Manufactured Home Loan Requirements

Both the property and borrower must meet certain criteria to qualify for an FHA manufactured home loan:

Home Requirements

Home must have HUD certification label
Home must be attached permanently to land and taxed as real estate
Land must have water, sewer, and road access
Foundation must meet FHA standards

Borrower Requirements

Credit score of at least 580
Debt-to-income ratio below 50%
Enough income to make payments
Intend to live in the home as primary residence

FHA looks at your credit, income, and expenses to determine if you can afford the loan. Credit scores as low as 580 may qualify.

FHA Manufactured Home Loan Terms

FHA loans for manufactured homes come with the following terms:

Down payment as low as 3.5%
Maximum loan amount up to $237,096
Fixed interest rate for life of loan
Loan term up to 20 years
Mortgage insurance required

The maximum loan amount depends on whether you have a single or multi-section home. The longer 20-year loan term is only for financing the home and land together.

How to Get an FHA Manufactured Home Loan

Follow these steps when getting an FHA manufactured home loan:

Find a home. Search for a HUD-approved manufactured home from a reputable dealer.
Choose lender. Pick an FHA-approved lender like Rocket Mortgage to start your loan application.
Apply for financing. Submit documents to verify income, assets, and credit.
Get appraisal. An appraiser will inspect the home to ensure it meets requirements.
Get loan approval. If approved, you’ll receive a loan estimate outlining costs.
Close on home. After final underwriting, close on your new home!

The lender will guide you through the entire loan process from application to closing.

Pros and Cons of FHA Manufactured Home Loans

FHA loans offer several advantages:

Pros

Low down payments, as low as 3.5%
More flexible credit and debt-to-income requirements
Lower interest rates than other financing
Fixed rate provides payment stability

Cons

Mortgage insurance required
Tougher to make competitive offers
Lower maximum loan amounts than conventional mortgages
Longer approval process

While FHA loans make financing easier, you may face competition from buyers with conventional mortgages.

Alternatives to FHA Manufactured Home Loans

Beyond FHA, here are some other options for financing a manufactured home:

Conventional loans – Require higher credit scores and down payments but offer higher loan amounts and no mortgage insurance.
USDA loans – Offer 100% financing and low rates in rural areas. Credit and income requirements still apply.
VA loans – Provide 100% financing with no down payment for qualifying veterans.
Personal loans – Unsecured loans that can be used for a down payment but have higher rates.
Dealer financing – Some dealers offer in-house financing but this can come with high rates or fees.

Compare all your choices to find the most affordable manufactured home loan for your situation.

Is an FHA Manufactured Home Loan Right for You?

Ask yourself these key questions:

Do you meet the minimum FHA credit score and income requirements?
Can you afford the monthly payments with your current debts?
Are you comfortable with the FHA loan limits for your area?
Do you qualify for a lower down payment as a first-time homebuyer?

If you answer yes, an FHA loan could be a great option. The low down payment and flexible credit guidelines help buyers purchase a quality manufactured home.

The Bottom Line

FHA manufactured home loans enable affordable financing for factory-built manufactured housing. If you want to buy a mobile or manufactured home, an FHA-backed mortgage can help make it possible.

Just be sure to pick a reputable lender like Rocket Mortgage. Their team can guide you through every step of the home buying process. You can also call their Home Loan Experts at (833) 326-6018 to learn more about getting started.

What is an FHA manufactured home loan?

An FHA manufactured home loan is a mortgage backed by the Federal Housing Administration (FHA) that you can use to purchase a home built in a factory. If you need to, you can also use the loan to buy a plot of land for the home to sit on.

You may know this type of house as a “mobile home,” but that isn’t the term used by the FHA today. FHA-eligible mobile homes are typically called manufactured homes and have to follow standards set in 1976 by the U.S. Department of Housing and Urban Development (HUD). Homes built before June 15, 1976, aren’t eligible for FHA financing.

You need to meet FHA minimum mortgage standards as a borrower, and your manufactured home and the land it sits on have to meet special property and construction requirements, all explained in more detail below.

Construction requirements for FHA manufactured home loans

FHA-approved lenders will need to verify the following:

The home site has access to water and sewer facilities
The site has all-weather access
The living area is at least 400 square feet
The home has an approved HUD seal visible on the exterior
Whether the home is permanently attached to land according to local building guidelines

FHA Mobile Home Requirements

FAQ

Will an FHA loan cover a manufactured home?

With the FHA Title I loan program: You can finance a new or used manufactured home, even if you don’t own the land it’s sitting on. You can finance a site for a manufactured home to sit on. You can finance repairs or improvements to a manufactured home you already own, as long as you own the lot it sits on.

Who is the best lender for manufactured homes?

Company	Starting Interest Rate	Loan Terms (range)
Manufactured Nationwide Best Overall	Varies	15, 20, or 30 years
ManufacturedHome.Loan Best for Good Credit	Varies	Varies
21st Mortgage Corporation Best for Bad Credit	Varies	Varies
eLend Best for Low Down Payment	Varies	Varies

Why is it hard to get a mortgage on a manufactured home?

Is it harder to finance a mobile home? If your home isn’t permanently attached to the land it’s located on, lenders will consider it “personal property” instead of “real estate.” When this is the case, you won’t be able to get a conventional loan. Instead, you may be offered a higher-interest “chattel loan.”

What is the oldest manufactured home for FHA?

A manufactured home must be built after June 15, 1976, and bear an affixed “HUD seal” on each section to be eligible for FHA Insurance. The appraiser should verify the location and wording on the seal(s). Manufactured houses built before June 15, 1976, must be rejected.